On first glance, these figures seem to indicate great potential. However, when you scratch the surface, problems start to emerge.

Fraud is one of the most significant issues, with false clicks or views recorded on a digital advert. The purpose is to create a perception that the ad is more successful than it is and hence generate more revenue from advertisers.

Fraud traffic like this happens in a multitude of ways, some more devious than others. Manual clicks are generated by people in “click farms,” employed to click on ads mindlessly. Devices may be hijacked by software that clicks on ads in the background or takes other actions without the user’s knowledge. In some cases, bots crawl websites, emulating the actions of genuine users.

These activities are on the increase, and it is costing advertisers heavily. Juniper Research estimates a cool $19 billion will be lost to ad fraud in 2018 alone.

Fraud Is Not the Only Problem

There are other issues. User data is vital to the ad industry, for enabling marketers to purchase the best slots to reach the most engaged audience. Access to user data, therefore, increases return on investment for advertising spend, as more users will click the ad. Due to convoluted supply chains and inefficient data aggregation systems, the availability and accuracy of user data are patchy.

This leads to some advertisers taking a quantity-over-quality approach to advertising, in an attempt to reach as many people as possible. From a user perspective, browsers, apps, and news feeds fill up with more and more irrelevant adverts. In turn, this leads to disengaged users who, at worst, install ad blockers. Around a fifth of the 16-34 year old demographic— a valuable group for advertisers—were using ad blockers by 2016.

Of course, other advertisers take a different approach. The Chief Marketing Officer of Proctor & Gamble decided this year to make deep cuts to the companies digital advertising budget, in response to the issues faced by the industry.

Enter Blockchain

Emerging technologies could now create a step change in the world of digital advertising. Blockchain provides a secure way of creating, storing, and exchanging online value. Bitcoin has provided a perfect proof of concept—after all, if money can be safely stored as digital value, the same principles can be extrapolated across many other use cases.

Savvy blockchain entrepreneurs have now started to unleash the value-capturing power of blockchain across the world of digital advertising. Their goals are to address the issues described above and create an environment of trust, security, and value across the digital advertising supply chain.

Kind Ads

Kind Ads, who recently partnered with CoinMarketCap, is a decentralized Ethereum-based advertising network. It uses the peer-to-peer connectivity of blockchain to connect brands and publishers directly. Like many other blockchain initiatives, the aim is to cut out the middleman, which in this case is the advertising platforms.

Image source: steemit.com

Advertisers will be able to browse the Kind Ads network for publishers based on factors such as their subscriber quality and historical ad effectiveness. Therefore, publishers will earn ad revenue based on the success of campaigns on their site and through email marketing campaigns. Users of the sites will be able to opt out of ads if they wish, as well as determine the amount of communication that is sent to them.

Zinc

Zinc shares some of the same goals as Kind Ads. However, the Zinc business model is not based around eliminating any of the current players in the ad industry. Instead, Zinc is introducing a blockchain-based platform that will integrate with the current digital advertising ecosystem. The company is placing a heavy focus on a quality user experience, providing rewards in exchange for the viewing of ads and access to data for use by the network.

The Zinc platform will record all clicks and views securely on the blockchain. This provides full transparency to advertisers about the success of their campaigns, in addition to a more robust set of user data that can be used to target ads more effectively.

Zinc was founded by experienced ad executive Daniel Trahtenberg. He was previously Head of Mobile Fraud Prevention and Director of the Mobile Data Management Platform at ironSource, a world leader in adtech solutions.

Basic Attention Token

Basic Attention Token (BAT) is a third blockchain solution for digital advertising with yet another different model. Like Kind Ads, BAT aims to cut out the ad platforms as intermediaries and create direct connections between publishers and advertisers.

Image source: coindevil.com

A fundamental difference is that BAT is rolling out its own open-source privacy-based web browser, called Brave. This browser will be the first one able to operate the BAT system; however, BAT has said that others will be added in the future.

How it works is that advertisers pay for slots in BATs as currency. The advertising fee will be apportioned out to the viewers of the ads, the BAT network and the publisher, hence monetizing user attention in a similar way to Zinc and Kind Ads.

The Future of the Digital Advertising Industry

The digital advertising industry still has enormous growth potential. However, a shakeup is sorely needed to ensure that advertisers don’t lose faith in the channel, and users don’t turn on the ad blockers.

Blockchain makes it possible to reward users for viewing ads. This could prove to be just the disruptor the industry needs.

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Disclaimer: The opinions expressed in this article do not represent the views of BitScreener. BitScreener is not responsible for the accuracy of any of the information supplied in articles such as this one.